The supplier of chips for wireless networking equipment Qualcomm Inc. agreed to pay its rival Broadcom Corp. $ 891 million over 4 years to resolve the perennial and increasingly fierce litigation of patent disputes.
Qualcomm, which has lost several key processes in cases of infringement of patent rights with Broadcom in the past two years, said that will undertake the first payment of $ 200 million to Broadcom in this quarter. Last week, Qualcomm moved its quarterly earnings announcement at the last moment, explaining that the conduct of intensive talks with Broadcom, which she started a patent war, reaching over three continents, in 2005.
Charter Equity Research analyst Ed Snyder (Ed Snyder) said that Qualcomm has a complete sense of legal uncertainty, even for large payments, analysts expect the company`s revenues at $ 2 35 billion This is certainly an expensive price for Qualcomm, but this is the best way out for both companies - said Snyder. This is a victory for Broadcom.
agreement would lead to a suspension of all litigation between the companies, including Broadcom patent claim against Qualcomm, sent to the Commission on International Trade and Court of Santa Ana, California. Companies have also agreed not to bring patent claims against each other in respect of their prospective chips and certain other products and services.
And Broadcom said that would withdraw its complaint against Qualcomm in Korea and the European Commission to promote fair trade as part of the transaction. The agreement provides that the Korean and European regulators must cease its investigation. But Qualcomm general counsel Donald Rosenberg (Donald Rosenberg) said that he hopes that the favor will be shown in respect of their dealings with Broadcom and last year`s agreement with Nokia.
Rosenberg explained that Qualcomm has decided to assume the payments because the company wanted to keep these disputes behind us - the cost of legal services increased, without end, distracting management, legal and engineering resources. The purpose of this is to remove the cause of the continuation of the trials - said Rosenberg, adding that lawyers Qualcomm and Broadcom were working round the clock during the couple of weeks, hoping to reach an agreement. The most powerful factor was the desire of both companies to focus on their business.
Qualcomm, which earns more profits in the sale of licenses, thanks to its patents on wireless technology, said that the agreement does not change its model income as a licensor of technology to existing high-speed third-generation or fourth generation of emerging technologies. For example, even if Qualcomm will not assert its patents against Broadcom, it still gives the right to receive royalties from buyers chips Broadcom, added Rosenberg.